Apparently, they are doing it to prevent ‘…financial products and services frequently associated with misleading or deceptive promotional practices.’

However, it has nothing to do with protecting people. Chances are Facebook is making sure they are doing the right thing by investors.

You see, cryptocurrencies are in the middle of a problem. This is a completely unregulated market. And people are whacking money into it faster than prices are rising.

The problem is that most people are doing this without researching cryptocurrencies in detail.

In my view, if someone is silly enough to click on an ad through Facebook, put a few thousand into an account, and start ‘trading’ cryptos, they’re the fool.

No one should ever put hard-earned dollars into any product without doing some research first. And, thanks to bitcoin, cryptocurrency information is everywhere.

In any case, Facebook took issue with the apps being promoted through its platform that would help users mine bitcoin with a smartphone.

But how realistic is that? Not very…

In November last year, The Guardian reported that global bitcoin mining used more electricity than Ireland:

‘According to Digiconomist the estimated power use of the bitcoin network, which is responsible for verifying transactions made with the cryptocurrency, is 30.14TWh a year, which exceeds that of 19 other European countries. At a continual power drain of 3.4GW, it means the network consumes five times more electricity than is produced by the largest wind farm in Europe, the London Array in the outer Thames Estuary, at 630MW.

‘Considering the endless comparisons between bitcoin mining and equivalent country power usage, you idiot if you fell for this.’

I’m curious as to who fell for this app. How do punters see the price rises but manage to ignore the incredible power usage required? No rational investor will believe their phone had the capable of mining bitcoin through an app.

So, who fell for it? Those that didn’t do their homework, that’s who.

With the bitcoin price now crashing to a recent low of US$6,914 (AU$8,849), some may feel this validates Facebook’s recent position that bitcoin and cryptos were a passing fad.

Fools and their money aside, there are bigger issues inside the crypto market.

Rather than Facebook working with legitimate crypto businesses, the company’s blanket ban on crypto ads prevents quality information from reaching people.

After all, the cryptocurrency market isn’t going anywhere. And there’s little point in trying to ignore or suppress its adoption.

Bitcoin scalability problem

Nonetheless, one of the biggest issues facing bitcoin today is the ability to ‘scale up’ technology.

Right now, each transaction on the bitcoin network is limited in size. And the more transactions taking place at once, the slower the network becomes, creating bottlenecks of orders waiting to go through.

With so many new users coming on board, the technology simply can’t keep up with the orders.

A crashing bitcoin market has scared many people. But that could be a good thing, says Sam Volkering, editor of Secret Crypto Network. It means all the people speculating on cryptos are most likely pulling out of the market. Leaving it wide open to everyone that believes in the long-term potential of this technology.

At the same time, the mass exodus frees up the blockchain. And allows some talented minds to work on the technology behind the scenes, as Sam points out:

‘For crypto to succeed in its mission, it’s the technology not the fiat-converted price that has to progress. And progress will inherently pull value along with it. To that end, the future looks very bright.

‘These are big challenges. The expected timeline for these solutions is three to five years.’

It could very well take half a decade to sort out crypto scaleability issues. Meaning that, over the next couple of years, people may use lose interest in jumping into cryptos looking to make a quick buck.

Again, Sam believes this is a good thing. In his view, the last thing the crypto market needs is people rushing in to invest. Instead, he says crypto newcomers should be investing because they want to be part of the biggest revolution to the monetary system in living history:

‘The fiat-converted price falls will shake out those that are in this market for the wrong reasons. And though we’d clearly rather see prices go up than down, the fact is that this technology revolution needs people to join and support the overall crypto markets for the right reasons.’

Make no mistake, falling prices and advertising bans are just noise. Cryptos aren’t going away. The technology is only just beginning to take shape. But you may need to wait half a decade before seeing its full potential.

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